E-commerce Growth Making an Impact on the Industry

Diving into the E-commerce Growth within Transportation and Logistics

The e-commerce industry is continuing to grow by leaps and bounds each year. Thanks to innovations from industry giants like Amazon, free two-day shipping is the norm and customers expect nothing less from other online retailers. The supply chain has adapted to consumer demand by becoming more integrated and efficient than ever before. However, e-commerce growth isn’t slowing down, so service providers are looking for new ways to stay competitive in today’s retail environment.

More Mergers Help Move More Product

We’re seeing an increase in mergers and acquisitions among companies who want to quickly add to their service offerings and strengthen their market position. In the past 12 months alone, there have been more than 20 merger and acquisitions transactions on North American soil within the e-commerce industry, with a specific focus on final mile delivery. For example, Target acquired Shipt Inc., to gain the capability of same-day delivery of perishable items. Likewise, Walmart acquired Parcel Inc., in an effort to offer same day delivery to Walmart and Jet customers in New York City.

These are just two examples of what big name retailers are doing to achieve e-commerce growth. But it’s the kind of activity we expect to continue to see as supply chains around the world seek to keep up with the explosion in the e-commerce industry.

Fuel Efficiency Stays in Focus

While mergers may help increase a company’s agility and aid quick growth, there’s also strong desire to keep costs down. Electric-powered, short-haul delivery trucks have always offered an innovative alternative to traditional, costly, fossil fuel-dependent vehicles. However, converting to an all or even partial-electric fleet was cost prohibitive, even with the benefit of longer term fuel savings.

Thanks to advancements in electric vehicle technology, the costs of ownership are now on par with diesel and gasoline fueled vehicles. In addition, we’re seeing the growth of the necessary infrastructure across the country to support electric fleets. Add increasingly tough emission standards to the mix and it’s practically inevitable that we’re going to replace our fossil-fuel powered fleets with electric fleets sooner rather than later.

Again, we can look at what industry giants are doing now to see the future. In 2017, UPS announced orders of 50 electric vehicles from Workhorse, an eTruck manufacturer that estimates its technology could improve fuel efficiency by more than 400%. Recently, UPS disclosed it has invested more than three-quarters of a billion dollars in alternative fuel vehicles since 2009. Other large players such as USPS, Penske, DHL, and Ryder have started pilot programs for electric trucks as well.

It’s clear we are on the verge of a critical mass when it comes to electric vehicles. The decreased costs associated with the electrification of final mile delivery could pave the way for new innovations and even more e-commerce growth.

If you’d like to discuss solutions to your e-commerce challenges, contact Taylored Fulfillment Services, a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Established in 1992 and headquartered in Iselin, New Jersey, Taylored Fulfillment Services operates 1.5 million square feet of warehouse and distribution space strategically located near the nation’s busiest ports, including Los Angeles, Long Beach, and New York.